Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): No positions are currently justified from the risk/reward point of view.
Stock prices went the highest since early May yesterday, but this morning the sentiment deteriorates. So is this a short-term topping pattern?
The S&P 500 index gained 1.84% on Thursday, as it retraced its Wednesday’s decline of 0.8%. The broad stock market extended its consolidation following last week’s rally. Yesterday’s daily high was at 4,177.5. On May 20 it went to the medium-term low of 3,810.32 and it was 1,008.3 points or 20.9% below the Jan. 4 record high of 4,818.62. So technically, the broad stock market entered a bear market territory. There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy and the Russia-Ukraine conflict. Today, the S&P 500 is expected to open 0.9% lower following mixed monthly jobs data release.
Futures Contract – Short-Term Consolidation
Let’s take a look at the hourly chart of the S&P 500 futures contract. It reached the 4,200 level on Monday, before retracing more than 100 points from the short-term local high. This morning it is trading closer to the local high again. For now, it looks like a consolidation within an uptrend.
In our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index will likely open lower this morning after mixed jobs data release and some negative corporate news from MU, TSLA. It still looks like a flat correction following last week’s rally. Investors will be waiting for June 15 FOMC’s interest rate decision.
Here’s the breakdown:
- The S&P 500 index will likely extend its short-term consolidation today; the resistance level is still at 4,200.
- In our opinion, no positions are currently justified from the risk/reward point of view.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): No positions are currently justified from the risk/reward point of view.
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
